Bussiness Gain or Loss

You show your income and expenses from this activity on Schedule C of the 1040. You compute your self-employment tax on the profit (we hope) on Schedule SE. As with anyone starting a business, you would benefit by a session with an accountant.

-- Phil Marti Clarksburg, MD

You should be filing a Schedule C (and other related forms) with your return to report that income and the related business expenses. One thing to keep in mind, if you have a legitimate business, make sure you do what a legitimate business does, and get a business license from your city. It's highly likely that given your situation, a license ifn't required, but check into it anyway. You also should be charging sales tax to anyone in your state that buys from you, and filing the forms regardless. A visit to a local CPA or EA would be something to plan to do in the next few weeks.

-- Paul Thomas, CPA snipped-for-privacy@bellsouth.net

You have a business which means you have to file schedule C and perhaps schedule SE if you had more than $433 of net Sch C profit. Check locally to see if state or local taxes are due.

__ Art Kamlet ArtKamlet @ AOL.com Columbus OH K2PZH

Your software business MUST be reported to the IRS by completing a 1040 Schedule C and SE to attach to your 1040 tax return. It has nothing to do with registering with the city, which probably isn't necessary unless you operate under an "assumed name" (like Joe Blow d/b/a Your Software Source). On Schedule C you will start out with your gross sales and then deduct expenses, including the Visa processing fees. The result from Schedule C is either a profit or loss and you owe no SE tax if it's a loss, but the loss is deductible from your other income as a negative number on 1040 line 12. If you made a profit follow the instructions on the forms. ed